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Spain 13, Tyler 12, Simon 12, Nike 11, Us 10, Google 8, Ellison 6, U.s. 6, Ireland 6, Larry Ellison 5, Sears 4, Schwab 4, Bertha Coombs 4, America 4, Greece 4, Italy 3, London 3, Oracle 3, Michelle 3, Darden 3,
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  CNBC    Power Lunch    News/Business. Today's news on the economy,  
   markets, real estate, media and technology. New. (CC)  

    September 27, 2012
    1:00 - 2:00pm EDT  

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we met all through the weekend. planned meetings for tuesday morning. i think it was just another factor that kept pushing us, that this was the right thing for the game. this was the right thing to do. get ought fishlz back on the field. get the agreement concluded. and that was really what everyone's objective was. so i think it was -- we were already in thain tensive period, and that's just another point that helped push us toward -- it just helped push us to the point where we got the agreement that we really needed to get and kept us in there. and i think there was a real pressure i think for everyone to get the officials back on the field this weekend. i think everybody -- the officials wanted to get back on. and i believe we would have reached an agreement this week regardless of monday night or sunday night or the past weekend. everybody was to the point of getting this concluded. >> you mentioned the intense negotiations to get what you
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want. did you get what you wanted to get out of this negotiation in terms of priorities going in? and was it worth whatever sacrifice was made over the last three, four weeks with replacements? >> you know, these negotiations are tough. labor negotiations and labor management disputes are difficult periods. and what's most difficult about it is you have the two parties but you have a lot of parties outside the room. they get impacted by it. starting with our fans. and we're sorry to have to bring our fans through that. we're sorry to bring the general public through that. that's unfortunately part of labor-management disputes. but they're also necessary to get those disputes resolved. and in a way that makes sense. you don't go into one of these trying to create a win-lose. you create a win-win. you're looking for a long-term agreement that people can look back and say we're proud of. and we'll help make officiating better, help make the nfl better. and be respectful and responsive
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to both parties. and the officials wanted to get certain aspects of their agreement resolved here. and a lot of theirs was economic. a lot of it was work conditions. and rightfully so. on the nfl's side, for my purposes i really wanted to make sure we were going to have things that would help officiating for the long term. full-time officials. having a pool of officials we could use to develop officials, to train them and get them on the field so we could make officiating better going forward. and make sure that the long-term interest of the game is taken care of. there are always -- it's always short-term pain but you've got to get to that long-term place. >> commissioner, there are some who say it should have never gotten to this point, that if there was a $3 million separation on the two sides in a multibillion-dollar business you should have worked it out before the season, that it was an embarrassment to the nfl. >> well, with all due respect, this is not just economics. i just got through talking about
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the last thing we discussed last night with the parties was full-time officiating. and it wasn't the first time. it was the last thing that was agreed to. because we had to work to try to get to the point of making sure the economics were in place, making sure that full-time officials was fully agreed to, how we were going to do that. and the pooling of new officials, where we could train them and develop them. so that was building consensus, not just on economic issues but on the long-term future of the game. >> roger goodell commenting on the closure of the second labor dispute in as much years involving the national football league. today of course concluding a pact with the nfl referees association. last year, of course, it was with the nfl players association in the lockout that ended right before the season started. let's in brian schactman, our sports business correspondent, as well as jon najarian, former
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nfl player. played with the chicago bears. mr. goodell said that he thought a deal would have been made this week regardless of what happened on monday night with the disputed call. jon, do you believe that? >> no. i would have hoped for that. because as we've already said, the numbers were just so staggering, tyler, on the side of the officials. there's only 121 officials. and the amount of money we're talking about is minuscule compared to that multibillion-dollar industry. so we had all hoped this would have been settled long ago. but instead, it was dragging out and it seemed like they were damned and determined to break, if you will, that union. instead, they did not. and i think the players and the fans are very grateful that they're going to get the real refs on the field tonight. >> brian, who wins here? >> listen, i think the fans and the league definitely wins. i mean, people have to understand, ratings for sunday night's game and monday night's game were through the roof. now, would that have continued
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if we had some other football-related -- what if somebody got hurt or they had another bad call? maybe sponsors or maybe fans would have started to take action. but the league was doing fine on the financial side of things. and this was a pittance, as dr. j pointed out. and i think the real winner here, regardless of what's in this new agreement, is the referees because in america people didn't really respect the profession, necessarily. well, now everyone acknowledges that there's real value in what these guys do. they got a pretty good deal, although pensions will be phased out, but people appreciate them now, which is the strangest thing i thoit would ever say about referees in the sports world. >> schac, i've got to ask you this. don't you think the sports books are pleased this went down this way, too? because with these massive swings, 300 million, 500 million, on games like the green bay game that you spoke of against seattle, that was a swing of nearly $500 million. that's a huge number. and those sports books must have been just getting cleaned out with these swings. >> believe it or not, it seems ironic, dr. j, that the sports books rely on credibility and
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they've all said to me, listen, we need a result, we want a definitive result. if it's in question, it puts them on the spot. a couple of betting websites said oh, we'll offer refunds or a free play. most people say that's kind of pr -- i don't want to say garbage, but it's just a pr move. they want to make the plays, they want to make the money and they don't want to see this stuff happened. so they are relieved. although gamblers gamble no matter what. gambling wasn't going to go down just because there was a will the more uncertainty. >> jon, very quickly, what do you expect to see tonight at the game between the ravens and the browns? do you think players are going to go out there and hug the returning referees? do you think fans are going to cheer them? >> i bet they do. and i bet you get a standing ovation out of the fans. certainly at the watering holes where i might be tonight, tyler, i think there will be a lot of cheering. >> in the history of any sport, simon. >> in watering holes across america, yes. >> thank you. let's go to the bond pits with some breaking news. $29 billion in seven-year notes rupp for auction and rick santelli's all over it.
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>> yeah, you know, tyler, this was pretty much one of the spongier of the three auctions. 29 billion seven years. the yield 1.055. so 105 1/2. 1.06 bid offered. 1.055. we priced it on the offer side at w.i. that's nice and tight. that's where the good news pretty much ends. the bid to cover 2.61, the weakest since october of last year, ten months, ten auction averages, 2.81. 41% is the ten auction average on indirects. 41.9 directs. ten auction average 14%. this one 17. dealers took roughly about 48% of the auction. this one's going to be a c. price solid but all the other metrics are a bit on the weak side. we give it an average grade. back to you. >> thank you very much for that, rick. well, as the nfl does a deal with its officials, some other employers across america are moving in a different direction. changing the way that americans pay for health insurance. and it's a very major negative
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development for many. darden and indeed sears are going to start giving employees money to make their own health insurance choices. those two companies may just be the tip of the iceberg. bertha coombs is across that story 24 lunchtime. >> neil over at nrs says these guys are in the vanguard. a lot of folks will be watching this. the reason darden and sears are changing the way they subsidize their employee health plans is basically to provide more control. more competitive choices to their employees. and to let them determine how much coverage they're willing to pay for. so how does it work? all right. normally, you get most firms, they are self-insured, they go out and they shop for plans from insurers. they offer you now over the next couple of months a variety of offerings. a handful. anything from a bare bone basic high deductible plan to a higher so-called cadillac plan. on average for 2013 the annual premiums for those cadillac plans is about $11,000, $11,500 for an individual. companies are paying about $8,500. and employees pick up the rest.
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anywhere from $2,600 to $3,000 through their payroll deductions. now, there is this new private insurance exchange that is launching this year, and they're going to work more like the insurance portals that individuals are now using to buy their insurance on, like ehealth. but in this case aon's mike christie says employees get a mix of offerings from a wide area of carriers who will offer rates that are comparable to the group plan rates now, which are usually cheaper than individual rates. essentially, the employer now takes that same chunk of money and they give you the shopping cart. you take that money. you go to that portal. you get to shop. now you can choose from a wider array of carriers usually, including united health, cigna, local blues, and then you choose what kind of plan you take from those carriers. so the carriers are all competing against one another for your business, and ostensibly you get a better choice. aon beta tested this internally in their own company last year. the thing their employees said
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they liked was having the control, having more choice, but the big shift is this involves a lot of education because it's a very different way to choose your insurance, tyler. >> oh, man. and it is going to hasten the debate over whether health insurance premiums ought to be counted as income to the recipient. bertha, thank you. >> right now the way they do it it's still under the erisa rules so, it's still a group plan but nonetheless it does shift the landscape there. >> just you watch. all right. thank you very much, bertha. u.s. regulators launching an all-out review into how wall street uses high-speed trading and how it's affecting the markets and the individual investor. eamon jafers live in washington. >> hi, tyler. the "wall street journal" reporting this morning the s.e.c. is reaching out and gathering as much information as it can from players in the high-frequency trading space, trying to understand exactly how it works and whether or not high frequency traders have an unfair advantage in the markets over average investors. now, i want to share with you some data that cnbc has on caned
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exclusively from nanex. it's an analysis firm out in chicago. what nanex is doing here is looking at facebook on the day it went public, and what they have spotted they say is a spread in the speed of data going to individual investors who subscribe to the consolidated feed and investors who subscribe to nasdaq's proprietary fooed feed, which you have to pay for. this is a very complicated graphic, but on the left you can see that spike down in the read, that is nasdaq's proprietary feed. and what you can see is 120 milliseconds later, a blink of an eye really, the same spike down is occurring in the consolidated feed. now, what nasdaq says this shows is a gap. if you're getting the prop feed, you're getting that information, the bid-ask spread, 120 milliseconds before everybody else is getting that same information. presumably, that's an advantage for high-frequency traders. if they spot the data gapping like that they can jump in and
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make trades before the average investors have that kind of information. now, we presented thissar chart to the folks over at nasdaq on friday. they have not commented to us on the record about it. but there's going to be a lot of questions i think about this kind of thing, how much advantage do high-frequency traders have, how often does it happen, and what is the cause of these kinds of gaps. all those are questions that are out there right now as people really focusing in on this high-frequency trading issue, simon. >> so the tale goes on. eamon, thank you very much for that. and the follow-up to the widely popular video game angry birds is out today, and it got the producers of "power lunch" thinking about their friends in southern europe and indeed the economy here in the united states. michelle caruso-cabrera will talk about some of the bad pigs in a minute, but first senior economics reporter steve liesman with the story of some vindicated doves. >> because the new game is called "bad piggies." that's where we're coming from. >> and we're only doing this because the producer jason
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gawertz made us do this. he said could we think of an app that would apply with today's data and i did. it's called vindicated doves. at least initially here, why is that? because essentially the economic data came in weak. let me show you what the economic data showed. the numbers come in you're looking for 5.6% positive -- or negative. you get minus 13.2 off a prior 3.27%. i think the dove says i don't care i had this one right. gdp took .4 off the prior print right there. midwest manufacturing down negative. p and pending home sales much changed from the prior month from positive to negative. take a look at some of the comments here. vindicated doves. anyone facing doubt about the need forred 23ed's recent stimulus must surely be silenced by the surprising weakness of the data coming out of the u.s." another coach, john riding says, "these orders," this is the durable goods data," "are putrid. we believe 9 weakness is tied to asia and europe as well as uncertainty over the tax environment for 2013."
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one piece of data. i don't know what kind of score you get on the vindicated doves here. but you can see the average coming down. the actual numbers before averaging them, 385 down to 359. get something improvement in jobs numbers together with the consumer snichlt jobs component was not too bad. we'll have to watch this closely. but right now we're taulg this vindicated doves and maybe there's another game out there, angry hawks but michelle has a much easier time of making this stretch of a metaphor to an app. all you. >> from vindicated doves, right? hi, simon. >> yes. let's get on with the bad piggies. i can't wait, michelle. not offensive to europeans at all. not offensive at all. you talk about the little piggies in southern europe. you go ahead with it. >> they went wee, wee, wee -- >> the new game is called bad piggies. this is an acronym used on wall street for portugal, ireland, italy, greece, and pain spain.
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piigs. two is there. let's give you the state of where they are right now. and the best way we thought was their ten-year yields. let's see if we can zoom in just a little bit here. portugal, their ten-year is yielding 8.9%. italy nearly 5.2%. here's what i think is the most interesting. ireland at 5.1. matching italy. even though ireland has had a full bailout, they seem to have the country that's coming back the most. they've actually been able to borrow money, which is unlike greece. spain still can borrow money. look at the yield on greece. 20%. this is the new debt, guys. right? so a lot of people think they're even going to default on their new debt. spain is yielding 5.9%. let's give you a look at where they stand when it comes to unemployment. pretty horrendous across the board. portugal 15%, italy 10%.
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ireland 14.7%. greece and spain above 24%. we want to drill down, though, into ireland because once again just as their yields are looking actually pretty good let's drill down into their unemployment levels and you'll see, so this is spain, a continuous high trajectory. ireland has started to level off. so once again, ireland appears to be the least bad piggie of the day. guys, back to you. >> all right. thank you very much, michelle. now, we've got the big picture laid out. kenny policari is icaps managing director. bob pisani just returned from spain. welcome. >> thank you. >> kenny, you said the market was going to go up today. what did you know? >> you know what? it's that -- >> and why are we up 80 pints? >> it's two things. certainly it's spain. i think what's coming out of spain. and i haven't read it there but it seems to be moving in the right direction. that couples with it is the end of the year, we did bounce off of 1425, which was a level of support the market needed to test. so here we are, we're going to get 1450 again.
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i think at 1450 and higher trades start to put up their longs again and even attempt to go short in anticipation -- >> a new high for the day, kenny. >> how wrong was i? >> and the fed continues to print money. >> that's right. >> the fact that pisani was over in spain spending money. >> i hate to bring it up, nobody like o's to talk about it, but we moved 60, 70 points on the dow the minute the economic news came out of spain. they got a new budget. more spending cuts than people thought. that's@market rally. here you see some of the violence that's been going on in madrid in the last couple weeks, in the last few days really. i was in barcelona for a week. there wasn't the rioting but there is in nationalist cat lonian fervor that is under way there. and they're talking about seceding from spain. it's a crazy idea. >> they've been talking about it for 30 years. it's not new. i know you just discovered barcelona but it's not new. >> the majority of the
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catalonian parliament has come out in favor of secession. that's -- >> are you sure? >> 83 of the 135. >> and that's new? >> that has not been that way before. that's moving in that direction. >> i stand corrected. >> what we're seeing here is the budget news is more aggressive than people thought. we had a nice rally when the numbers came out because people were thinking they weren't going to dot cuts, the spending cuts people thought and they actually ended up doing it -- >> i think it's also the legal changes they're promising over the next six months, which would be what the european union would demand for them to get the bailout on the bond buying. so they're kind of prestamping themselves for that approval. >> because there would be real structural changes. >> yes. >> but you know, what's interesting, we talk about how the parkt rallied on the good news out of spain because that's what everyone wants to hear. this morning we had all that negative news in the u.s. and what did the market do? not anything. we were up eight. we went to up five. because people are more interested in what's going to happen out of europe. >> the recommendation as apparently exceed the eu
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recommendations. the economic minister of spain came out and said that. and that's when the market rallied. >> polcari and pisani two, peas in a pod. thank you very much for being here. we'll talk about that bourbon chicken a little later. >> absolutely. >> terrific. if you've got kids, this is going to scare you. we promise you. we're talking about the cost of college next. plus two great stories from two great ladies. jane and diana. diana, you're up first. >> well, tyler, some very complicating data left and right, up and down on the state of u.s. housing out today. i'll have the key to figuring out where you stand. just first to jane. >> well, you know, we've been talking about this whole global bacon hysteria. now we're finding out what may be next. what do you need to get hysterical about? we're not just talking about hoarding water and toilet paper. they're mentioning beer and coffee. is life even worth living? when "power lunch" comes back.
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welcome back to "power lunch." i'm bertha coombs with a market flash. watching financials, they're doing pretty well. sandler o'neill says market participants are still more cautious and have more risk aversion than they did this time last year, and they think that's going to bode well for morgan sachs and diana olick is live in washington. hi, diana.
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>> welcome to today's housing recovery. pending home sales, which is a measure of contracts signed to buy existing homes, not closing, fell 2.6% in august month to month and that was a surprise to the down side. the realtors index is still up nearly 11% from a year ago but the trend in sales had been pointing up. now you've got mortgage rates down to a new record low thanks to a new 3. the august pendings were before that. as rates dropped mortgage plirkss to purchase a home rose slightsly. we've been talking about investors fueling this market. most of them using all cash. they buy on the low end. the foreclosures or short sales. but the supplies there have been dwindling. especially out west. out west is where we saw the biggest decline in pending home sales down over 7% month to month. foreclosure sales have fallen to just 14% of total sales. the smallest percentage since january of '08, according to radar logic. foreclosures accounted for 36%
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of sales back in the beginning of 2011. now, as we look into fall, sales numbers will depend a lot on how quickly the banks work through all these delinquent loans and get more foreclosed properties out onto the market. more online, real realtycheck.cnbc.com. tyler? >> diana in my hometown, d.c. on "power lunch" 24 hours ago we told you about a possible global bacon shortage. it may sound funny to you but not to me. as serious implications the chinese are thinking about creating a strategic pork reserve to get ahead of any crisis. so what are americans hoarding? jane wells found out. jane? >> tyler, we are facing the zombie apocalypse and bacon is just the beginning. it turns out the next thing could be german beer. could disappear due to water shortages reports the daily beast. we could also face the death of chocolate, coffee, pasta, and even peanut butter due to climate change. no coffee? i will be the walking dead. and pasta's not the only wheat product at risk.
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jack bauer is hoarding flour. >> who's your supplier? >> my what? >> where do you get your flour? >> in this hilarious new ad for acor laptops kiefer sutherland goes all "24" in his quest to secure ingredients for cupcakes. in the meantime we should still here prescott financial's three guys as seen on "the colbert report." >> gold, women, sheep. will you be ready? >> will you? other suggestions, hoard competent referees since we will soon new refs as much as we hate the old ones. time to hoard alternatives like the ostrich pillow, which has raised $86,000 on kickstarter to come to market. on twitter joe tweets, "i'll be stockpiling hip waders to get through the upcoming debate commentaries." and this fantastic important list from mac d surfer. stockpile maps, actual paper maps if you own apple products. also honey booboo dvds, 50
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straids shades of grey for her, viagra for him and call me maybe soundtracks. i hear zombies flee from the sound of "call me maybe." >> thank you very much. bertha coombs with a market flash. >> this will cheer you if you're long. metro pcs shares are popping here on reports that they may be in talks. they've engaged suitors for the company. you can see it's moving higher. the stock actually already up this year at some 39%. 40% now year to date with this move, simon. >> thank you very much. british prime minister david cameron getting himself in some real hot water on television last night. david letterman asked mr. cameron a question to which he had absolutely no idea. we'll show you how the talk show star put this world leader on the spot. next. [ male announcer ] the 2013 smart comes with 8 airbags,
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no. if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally. [ male announcer ] the exceedingly nimble, ridiculously agile, tight turning, fun to drive 2013 smart. ♪ welcome back to "power lunch." i'm sharon epperson here on the floor of the new york mercantile exchange. gold prices closing up over $25 on this session, closing right around 1780 an ounce. a lot of traders here on the floor say there is no way going into the end of the month, the end of the quarter they want to be short this market. there is too much uncertainty going on. they're listening to what's happening at the u.n. general assembly between iran and
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israel's prime ministers talking and they're also watching what is happening in the euro zone. chinese stimulus. perhaps more of that on the table with the weak data we got from there. a lot of reasons to be long this market. silver 3r50iss also near the highs of the session as we close here. and even copper prices that have been on a bit of a roller coaster ride given a little bit of a lift. back to you. >> all right. thank you very much, sharon. let's get some trading action talk with bob piz ni on the floor. hey, bob. >> we rallied mid-morning. the spanish budget came out. believe it or not. yes, it moves the stock market here. the cuts were a little more notable than people had anticipated. so the s&p moved up. moved up 60 or 70 points in the dow. there's the s&p. and there's that mid-morning move to the up side. of course the euro also rallied on this news too. and when the euro rallies usually the dollar moves to the down side a little bit. that tends to help some of the risk on trade. we did see some of the many mining stocks that moved to the
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up side. a lot of the material names like bhp billiton. that gave the market a little best a lift. then of course we also moved up with the energy stocks, the whole complex moved up on the weaker dollar. >> and we have -- thank you, bob. we have an out performance on tech stocks. certainly at the nasdaq. sima mody has more on that this lunch time. >> seeing somewhat of a relief rally in tech this morning. and that's partly thanks to apple, sheeg a relief rally in apple after three days of ending in negative territory. even today ubf cutting its iphone estimates yet reaffirming its buy rating on apple, shares up 2%. google continuing its ride higher, celebrating its 14th birthday, and also evercorps gifting goog well a price target increase. stock up about .2%. also want to point your attention to research in motion, earnings after the bell, so we continue to watch the stock. and yahoo. google today reinstating coverage on the stock with a buy rating. back to you, simon and sue. >> thank you very much. seema mody. two key reports out after the bell.
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we're going to get you ahead of the game on both of those when we look at nike next. rim also reporting. how much trouble are they in? how much is discounted into the market with a stock that is halved in value in just six months. and has larry ellison been spending too much money? he's doing something fairly unusual for someone as rich as he is. unless he's avoiding a hike in capital gains. [ male announcer] when this hotel added aflac to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha! ♪ [ male announcer ] introducing a stunning work of technology. introducing the entirely new lexus es. and the first-ever es hybrid. this is the pursuit of perfection. and the first-ever es hybrid. if we want to improve our schools... ...what should we invest in? maybe new buildings?
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beleaguered research in motion set to report its second quarter earnings after the bell today. shares of the blackberry maker ticking higher right now but diving 51% just this year. jon fortt is in san jose with a look at whether now is the time for rim to give up on its playbook tablet. hi, jon. >> hey, tyler. believe it or not, exactly two years ago today rim unveiled the playbook tablet. and unfortunately, i think it's fair to say that in the history of sports, nay, the history of human endeavor, rarely has a playbook contained fewer winning plays. rim's ceo said in march the playbook had more than a million customers. but keep in mind that's nearly a year after the thing began shipping. now priced at $199. last quarter apple sold a million ipads at more than twice
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that price every six days. so why doesn't rim put the playbook to sleep? the short answer is blackberry so-10. the playbook is running the closest thing o.s. that customers can get their hands on. killing the playbook would look bad for the o.s. that rim's betting its future on. lately they've been selling the playbook at cost sometimes less. employees can get one for 99 bucks. both amazon and barnes & nobility readying better tablets at the same price tpts going to be a brutal holiday saenz for rim's tablet. >> also eternityings central beat is nike. it is set to report first quarter results after the bell today. its shares have been sort of flat this year. brian schactman joins us for a look at nike versus its competitors like under armour and lulu lemon. >> lulu lemon. right. and most say these guys are big threats but others say it's positive for nike because it will make them better. sales in north america should still be strong but continued weakness in china, especially with apparel, could be a bit of a problem. stern a.g.'s sam posner has a
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neutral rating on nike and says gross margins are the key here, nike has missed guidance in each of the last three quarters. ubs has a buy at a $106 target opt stock. they believe a massive u.s. quarter may offset the woes in china. now the competition. lulu lemon ceo christine day is saying her company is taking share with fitness-focused women. under armour is the one really in nike's crosshairs and maybe vice versa. it's double down on shoes and as nike's stock has been flat year to date, u.a. is up 50%. some say that's because of takeover chatter. nike would leverage itself quite a bit. under armour has a $6 billion nike cap. nike has 2.3 billion in cash. results after the bell. back to you. >> oracle ceo larry ellison is one of the richest men in the world of course worth more than $30 billion, but he's doing some things that have really caught the eye of our wealth editor robert frank. robert? >> that's right, tyler. when we come back, why is larry
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go national. go like a pro. coming up at the top of the hour, a great so-called "street signs." lots of things we're going to be looking at. when you look at the way durable goods orders really fell off the cliff we ask have we already run off the fiscal cliff? and israeli prime minister netanyahu expected to take to the stage any minute now, possibly during our show at the u.n., and he is expected to set a clear red line for iran. what impact will that have on oil? and also j.k. rowling's new book for adults this time. why? why not just take the harry potter billions and enjoy? we're going to debate that as well. lot of things coming up on strnz top of the hour. simon, tyler. goldman sachs settling charges with the s.e.c. today. the firm is going to pay 12 million tods do so. the government said goldman
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sachs violated pay to play rules involving undisclosed campaign contributions to former massachusetts state treasurer timothy cahill when he ran for governor of the bay state. larry ellison is one of the -- hello. larry ellison is one of the -- that was good. larry ellison is one of the richest men in the world, worth over $30 billion. but is he spending too much? cnbc wealth editor robert frank has dug into the oracle ceo's expenses. robert, what have you found? >> thanks, simon. well, apparently, buying islands in hawaii, that can start to get pretty expensive. oracle's latest proxy shows that larry ellison has pledged 139 million shares as collateral to "secure certain personal indebtedness including various lines of credit." now, that means he's pledged $4.2 billion in stock for personal loans and lines of credit. why does he need so much cash? well, you might remember that ellison bought lanai, the sixth largest island in hawaii, for $500 million earlier this summer. this week he also bought another property, $37 million mansion in
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malibu. he already owns about five properties on the same stretch of beach. that in addition to the mansion he owns in rhode island, a giant home in san francisco, a villa in tokyo, and a 240-acre estate near paul springs that has its own 19-hole golf course. now, that's not to mention the properties he's buying around lake tahoe. now, ellison also likes his jets, his sport cars, and his yachts. last year he received his newest yacht, a 280-foot boat called "mushashi." that replaces the 450-footer "rising sun." now, ellison has also spent millions on his america's cup sailing team and of course the nn indian wells tennis tournament. we should say ellison still is worth more than $30 billion. he's got plenty to burn. the shares represent only 12% of his total holdings. but it's worth remembering, in 2002 ellison's own financial adviser warned him in an e-mail about all this spending. he said, "i'm worried, larry. we have a freight train going down a track hitting a debt wall."
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for now, simon, that spending train keeps rolling on. >> wow. >> all right, robert, thank you very much. let's go to bertha coombs now for a quick market update. >> quickly, let's look at lockhood maernt. already has a pretty rich dividend yield of 4%. it is raising its dividend yield. now going to be paying out $1.15 a share. nice little payout there if you're long. >> all right, bertha, thank you very much. and it is happy birthday, google. 14th birthday. the precocious adolescent has a $246 billion market value. the stock at record highs. it's got 50,000 employees. a billion daily searches. that's just my searches, by the way. not to mention g mail, android, youtube, google maps, and now google for entrepreneurs. one of those 50,000 employees is mary grove, and she's leading google's charge to make her company more accessible to start-ups. mary, welcome, good to have you with us. >> thank you so much for having us. >> what is this initiative that google is having you lead
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directed at start-ups and entrepreneurs? >> sure. >> what are you doing? >> so this week we're pleased to launch google for entrepreneurs, which is the umbrella of all of google's programs and partnerships to supports start-ups and entrepreneurs around the world. we have roughly 50 efforts live in over 30 countries. what we've launched this week as well is a website, google.com/entrepreneurs, which is that formal resource startup -- >> give me an example of the kinds of things that you're trying to help entrepreneurs and start-ups with. in various countries. >> you bet. we really have two different focus areas. the first is around partnerships. and the second is around programs. in partnerships we work with a number of organizations who have both global scale and who are active in local xhurnths helping start-ups get started and really scale up off the ground. one of our largest partners is start-up weekends, and they're a great organization who host these 54-hour weekend events and basically entrepreneurs from different backgrounds get together, they form teams, they hack out the weekend and they launch start-ups on sunday night.
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google is the global sponsor of startup weekends. we've seen them scale to 500 cities in 70 countries. >> how is what you're doing different in some of the other countries you work in as opposed to here in the u.s.? what kinds of help, services, programs are you supplying to out of country folks that you're not supplying or maybe deemphasizing here? >> great question, tyler. so we work with a number of partners across the globe and we really look at in the given community what is the need, where can google add the most value? in london we're quite active. the feedback 23r9 startup community is it's very expensive to find space and connectist. so we've opened a seven-story building in east london called campus london. basically that is google's gift to the startup community. it's a central hub where start-ups can come, get space. we work with partners like seed camp and tech hub who run programs for the startup community there in the building. >> google is not a charitable organization. so the question is how does google make money off of this? >> there's two real thrusts behind this initiative for us. the first is that we really believe that innovation and
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growth is good for everyone. so an increase in start-ups who are growing, becoming successful, utilizing the web is great for economic growth. it's great for them. but it's also great for google as well. and i think the second -- >> so they're not counting you on being a profit center? >> it's really we believe this rising tide of innovation is good for everybody including google's business. and the other reason is really that we ourselves, you mentioned it's our birthday today. >> happy birthday, by the way. >> thank you. >> and we began as that -- >> you don't look a day over 14, by the way. >> you yourself. >> i like you already. so if someone wants to get in touch with this program how do they do it? >> google.com/entrepreneurs is that central resource you can find about events and programs and talk to us. >> again, happy birthday. good to have you with us. all righty. we have a lot coming up. the british stuff in the next segment. we've got the guy right here, simon, who's going to do it. j.k. rowling goes a very different way in her latest book. no muggles. just a lot of adult situations. plus a tough night for prime
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all right, simon, have you seen this? it is british -- letterman. it's british. that's letterman. having a bit of a squirm last night on david's show. he was asked what the magna carta literally translates to in english. >> the literal translation is -- was what? you have magna -- >> again, you're testing me. >> boy, it would be good if you knew this. >> yeah, it would be. >> you know, if somebody asked me, simon, in all fairness, there's what it is. if somebody said to me, what's habeas corpus mean i? wouldn't even know what corpus christi means. >> to an american it's an obvious question to ask the british prime minister. actually britons are not actually still in the 15th century fox hunting and all the rest of it. >> learning latin, by the way. >> he's concerned about iphones and budget deficits. but you see britons as something
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very different, somebody unlike yourself, which is not true. >> it means great charter. >> i saw that. >> all i know is corpus christi is a town in texas. i don't know what it means. habeas corpus? jon, you're a lawyer. what does habeas corpus mean? >> i don't know. >> there's a lawyer, he doesn't know. and he's not even british. how do you like that? anyhow, moving on to the next one, right? sears and darden restaurants offering cash to buy their own health plans. the company says it's not to save money. yeah, right. but do give workers more control. i always like that when they put it in there as a more controlled kind of thing. >> that's not the purpose of an employer, to give you more control. so you know at some level this is about saving money for the company. so what that means is over the long term health care costs are going to shift to employees. this is happening in a lot of big companies. they're considering -- >> here's what our yahoo.com poll says, finance.yahoo or
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whatever it is. a majority of americans want to stick with their current plans. i prefer employer plans 62%. i'd prefer vouchers like this. >> they're not giving them the cash. that's a misnomer. this is a very dangerous development. people are stronger when they stand together. when sears wants to turn itself o'around it will say to the employees stand with us and turn this business around. in the same way the employer should stand with the staff and say we will help you find your health care plan, we will buy in bulk on your behalf. this is very, very detrimental to the united states long term. >> it ultimately is going to do something, though -- [ bell ]. i kind of disagree. because i think if consumers know -- >> if they understand. can you understand your health plan? >> i can't understand my health plan today. i don't know what it covers and what it doesn't. >> it puts employees at the mercy of the insurance companies and they're really going to be defenseless. >> and you have 206 perfect information. why should everybody have perfect information when their employer can help everybody at once to get to that? >> i'll tell you one thing i'm not going to do, is go through a
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whole book on every potential plan that i might look at to see -- >> they might do it on your behalf. >> oh, sure. >> koording to a new irs inspector general report 70 federal agencies owe $14 million in taxes. so why does the government hate taxes, john? >> it's not just these federal agencies that owe taxes. we learned earlier in the year that over a billion dollars is owed by federal employees. there's a scofflaw problem in our very government. >> this is total nonsense. i just the figures -- >> this is social security taxes, right? >> i just checked how many federal employees there were in october -- in august. it works out at just over $6 per employee. it's neither here nor there. it's an accounting error -- >> but there is something very silly about the government paying itself taxes. >> it's a delay in funding. >> they're already immune to the federal income tax. the government doesn't pay
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federal income tax. it doesn't really make sense. >> it's a non-story. >> move over "50 shades of grey." j.k. -- >> is it rowling or rowling? >> i have no idea. >> highly anticipated first adult novel, "the casual vacancy." it's in bookstores today. it's already number one on amazon's best-seller list. but will drugs, sex, and swearing in the book -- >> is it in the book? >> i guess ds. it must be. >> there's heroin addiction. there's sex in a cemetery. it's very racy and very adult book. >> a suburban setting in britain. >> is this going to hurt her brand? >> i think it -- what she's trying to do here -- because you might think why would you even write a book? she's made so much money. what does she want? she wants prestige. this is about her attempting to break out of a child's author and being an adult author. so it's not even how many books sell. it's how they're reviewed. she's doing this -- >> did she tell you this?
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or are you channeling j.k. rowling? >> i'm channeling her. it's like why does a billionaire keep running his hedge fund? he does it for prestige, not money. she's not doing this for money -- >> maybe she likes to write. >> sure, she does. >> i think she should have written "50 shades of hogwarts." >> nasty. the mind boggles. >> the mind muggles. all right, simon. next hour, are we already over the fiscal cliff? >> you should work on cable. you know that? >> are we already over the fiscal cliff and we just don't know it? i don't know. more "power lunch" is coming up. we'll tell you. now, that's what i call a test drive.
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now save 50% on banners. welcome back to "power lunch." shares of transocean are getting rocked. the company says it's been served with a preliminary injunction in brazil to stop operations there over 30 days. this relates to spill on a rig that it was operating for chevron last year. the company says it is going to appeal that decision. simon? >> thank you very much, bertha. if we carry on like this, we could have a gain by the time maria bartiromo takes to the air. there you go. 13,507 on the dow. i assume this has got a lot to do with the fed tie. >> could be with the fed. could be end of quarter sort of window dressing -- >> that's true, yes.
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>> as people pile into blue chips. and look at the nice little move in technology shares there, up 42 points on the nasdaq composite. >> research in motion reporting after the close tonight. nike. neither of those typically market movers but still worth watching. >> great to be with you, simon. >> what an honor. that's it for "power lunch." >> you're the replacement referee. you didn't blow a call all day, man. "street signs" begins now. and welcome to "street signs." and while congress stalls, the economy appears to be stalling. economic data showing a slowdown. and forget december 31st. is the fiscal cliff impact already here? the president slamming trickle-down economics. but isn't that exactly what the fed is doing? why the so-called fed effect stinks for the little guy. plus, guess who's not paying their fair share in taxes. the federal government. a story you will not want to

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